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Most Active Discussions

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  1. Economic Enlightenment in Relation to College-going, Ideology, and Other Variables: A Zogby Survey of Americans

    • That this “survey” passes for anything other than the ridiculous crock it is is extremely troubling. 8 agree or disagree statements, with and admitted political bias (In what way does asking questions which only challenge liberal mentalities give any kind of a useful result measured against political ideology?). What’s more, all but two of the questions could be correctly answered by simply following the “all government action bad” philosophy.

      Especially troubling are the following two questions: “Third-world workers working for American companies overseas are being exploited,” and “Free trade leads to unemployment.” The first question is WAY too open to interpretation as to the meaning of the word “exploited,” while the second should certainly be qualified by a statement either limiting it to immediate effect (assuming that this does not contribute positively to specialization, allowing new industries to develop which might suck up the surplus), or at least noting noting that it does not refer to a poorer country which signs a free trade agreement with a richer one.

      The two remaining questions, which aren’t simple “government bad” types, aren’t terrible, but any test that you can score highly on with no knowledge other than “biggest market share does not necessarily equal monopoly, government is bad, and stuff is better than it was” can hardly be said to be an indicator of economic knowledge.

      I don’t know if the authors are trying to push a political ideology as grounded in fact (an easy conclusion to reach, given the giddy, masturbatory response the study has had on arch conservative online publications such as “American Spectator”), but this survey should be fully discounted by every respectable publication as the crock it is. This is the first thing I’ve come across on Econ Journal Watch, so maybe it’s a joke publication, but if not, for shame.

    • 6 comments
    • First comment 10 Jun 2010 by N. Joseph Potts
    • Last comment 16 Nov 2015 by wargames83
  2. Adam Smith, the Last of the Former Virtue Ethicists

    • Deirdre McCloskey’s article, “Adam Smith, Last of the Former Virtue Ethicists,” is a well-reasoned piece that seeks to dispel the notion that Adam Smith was primarily an economist. As she states in the opening sentence (I love writers who get to the point), “Smith was mainly an ethical philosopher.” Her article traces the line of ethicists from Plato to Smith who believed that seven primary virtues (justice, fortitude, prudence, temperance, benevolence, faith, and hope) provide the foundation for all morality. Where Smith based his economics in his philosophy of ethics, McCloskey shows how modern economists have largely forsaken this connection, forgetting the tie that economics (presented in Smith’s Wealth of Nations) must maintain with ethics (presented in his Theory of Moral Sentiments). In fact, the ethical side of Smith, represented by TMS, was largely forgotten until relatively recently.

      Ms. McCloskey is well-qualified to write a piece on Adam Smith the philosopher, instead of Adam Smith, the economist. Of course Adam Smith WAS really a philosopher: his job title at University of Glasgow circa 1760 reads “Professor of Moral Philosophy.” McCloskey’s position description is similarly expansive at University of Illinois, Chicago: “Professor of Economics, History, English, and Communication.” She is, like Smith, evidently a polymath.

      Most economists today approach Adam Smith from one of two angles. Either he was (1) a free-market capitalist, originator of the “Invisible hand” and early opponent of mercantilist voodoo; or (2) a free-market capitalist and author of The Wealth of Nations (WN), who also wrote a book of philosophy (TMS), which is probably brilliant, but contains language and concepts foreign to (and apparently inconsistent with) WN, and thus to be avoided.

      McCloskey sees no inconsistency between Smith’s two great published works. She sees no need to jettison the moral reasoning of TMS in order to focus on the economic insight of WN. Indeed, she sees Smith’s ethical philosophy as foundational to his economics, and urges present-day economists to make a similar connection. Smith she sees as primarily an ethicist (like the other former virtue ethicists: namely Plato, Aristotle, and Aquinas), whose moral thinking drove his economic thinking. Divorcing the moral aspect of Smith’s thought (as modern-day economists do when they ignore TMS) rends WN, leaving it devoid of its context and true meaning. Similarly, such a divorce rends modern economics from a sure foundation, leaving it amoral, adrift on a sea of maximum utility.

    • 6 comments
    • First comment 22 Sep 2010 by Steve Kunath
    • Last comment 14 Nov 2012 by Todd Peckarsky
  3. Mankiw vs. DeLong and Krugman on the CEA’s Real GDP Forecasts in Early 2009: What Might a Time Series Econometrician Have Said?

    • As a non-economist, I lack the expertise to critique the methodology of an economic analysis of this sort, but I’m skeptical of the objectivity of a hypothetical, retrospective prediction of what is now known to have transpired since. Why “posit a hypothetical time series econometrician who, at the time of the blog entries, applies some standard forecasting methods”? Weren’t such analyses with these “standard forecasting methods” done at the time? Did Professor Cushman offer such an analysis at the time?

    • 5 comments
    • First comment 23 Sep 2012 by Brooks
    • Last comment 24 Sep 2012 by Alex Nash
  4. Religion, Heuristics, and Intergenerational Risk Management

    • On the Modigliani-Miller Theorem:
      “Economists calling this result a “theorem” when it is fragile to change of assumptions caused it to be taken more seriously than was warranted.” Actually, a statement is a theorem ONLY if it is fragile. The idea of a theorem is that you specify the exact conditions under which the conclusion is true. The most satisfactory theorems, for theory, say, “If and only if X is true, then Y is true also.” The MM theorem says that capital structure doesn’t matter under certain conditions, including that there is no corporate income tax and no moral hazard. The problem is with people who don’t know what “theorem” means and who think of mathematics and science as magic rather than ways of thinking, or who know better but are trying to fool less sophisticated people (which was more important in the case of the Li copula formula is still unclear to me).

    • 5 comments
    • First comment 30 May 2014 by Tom Garnett
    • Last comment 15 Aug 2015 by G. Ashton
  5. Advanced Placement Economics: The Good, the Bad, and the Ugly

    • I totally concur with this article. I had three kids of mine go through AP economics, both micro and macro. I was appalled – the material was 30 years behind the times, both micro and macro. AP economics is confirming the worst stereotypes of what economics is about. And it was boring, boring, boring, even to me.

    • 4 comments
    • First comment 25 Jan 2011 by Paul Johnson
    • Last comment 16 Mar 2011 by David B
  6. The Ideological Profile of Harvard University Press: Categorizing 494 Books Published 2000-2010

    • The percentages in Table 1 are difficult to interpret. There are no 100% totals in this table so we can’t tell if the cell percentages are column percentages or row percentages. With effort, one can determine that all the percentages — except those in the bottom row — are column percentages. Putting 100% totals at the bottom of each column would facilitate understanding. , Showing the prevalence of each subject area could be done in the column titles, in the body or in a separate row below the 100% column totals.
      Figure 1 would have been more useful if the percentages were of “All Ideological HUP Books Surveyed” so the percentages would add to 100%.

    • 4 comments
    • First comment 24 Jan 2011 by Hal Luft
    • Last comment 16 Feb 2011 by Milo Schield
  7. The Liberty of the Ancients Compared with that of the Moderns

    • Constant provides an enlightening look at the concept of liberty in ancient western civilizations. For the ancients, liberty came through collective and direct participation in the polity. Life was affirmed through the polity: the alternative was to live as a barbarian. Freedom came collectively and was a privilege that could be taken away by the polity. Constant doesn’t mention that in some way such privileged liberty is similar to that of the towns and burghs that developed during the Medieval period, where citizens faced returning to manor life should they not temper themselves to the rules of the city (to be sure, the liberty that emerged in Medieval burghs resembled more closely individual modern liberty).

      Constant delivered his lecture in 1819, but his insistence on affirming that modern liberty is individual – as opposed to the collectivized liberty of the ancients – is as important today as it was then. He criticizes Rousseau , de Mably, and Montesquieu for conflating ancient and modern liberty in an attempt to assert the power of the state – and those at its helm. Still today – though perhaps without reference to ancient philosophy – illiberal thinkers assert that liberty comes through the state and is not held individually. In a very nice small section on commerce, Constant talks about ‘owning’ being merely a use-right to a piece of land; something we see today in the bundle theory of rights.

      He ends with a beautiful call for institutions to carry out the moral education of their citizens, not by forcing upon them some interpretation of morality, but by respecting their individual rights and creating proper incentives for moral behavior and civic participation. He mentions institutions in the context of the work of the legislature, but doesn’t say explicitly that all such institutions must come from the state, leaving one to think he refers not only to institutions of government but also those created by the culture and the market.

    • 4 comments
    • First comment 15 Apr 2011 by Ariel Nerbovig
    • Last comment 06 May 2011 by Stephanie Myla Helmick
  8. Entrepreneurship and Islam: An Overview

    • Are you aware of English language resources which make apparent the main schools of thought and areas of unresolved discussion in current religious and/or secular debates in Islamic entrepreneurship and/or finance?

    • 4 comments
    • First comment 31 May 2014 by Eric Rasmusen
    • Last comment 03 Jun 2014 by Nathan W
  9. Preference Falsification in the Economics Profession

    • Preference falsification is equivalent to the term “pluralistic ignorance” used in social psychology. There have been a number of studies that have isolated this phenomenon (e.g., public versus private views of drinking habits on college campuses in Prentice and Miller 1993) and suggestions regarding how to alleviate it. For example, Halbesleben et al. (2005) conducted a study on business school students. Previously, it was observed that private views on ethical conduct in business diverged significantly from public views. In general, everyone wanted to be more ethical, but believed everyone else would behave unethically. The researchers administered ethics surveys several times during a semester to students in two classes. The surveys required students to indicate what they would do given a particular situation and what they thought others would do in that situation. In one of the classes, the lecturers spent one session teaching pluralistic ignorance, although not linking this lesson to the surveys or business ethics in general. The researchers found that, in business settings, the class receiving the pluralistic ignorance lesson reduced pluralistic ignorance on the ethics surveys and responded more ethically to surveys.

      This study provides reason for optimism for the economics profession. Merely educating students about the phenomenon of pluralistic ignorance (or preference falsification) reduces the phenomenon somewhat. The researchers did not even link the concept of pluralistic ignorance with the ethics surveys. Surely, educating economists on pluralistic ignorance and presenting results of studies similar to Davis’s should greatly reduce pluralistic ignorance in the economics profession. Moreover, one would suspect that the Internet, a medium that strongly promotes the exchange of ideas and internal viewpoints, would also alleviate the “ignorance” of the majority viewpoint. Davis describes that pluralistic ignorance can perpetuate social undesirable practices, but then “can suddenly, and dramatically change” those practices. Perhaps, the economics profession will soon undergo such a change.

      References
      Halbesleben, R. B., A. R. Wheeler, and M. R. Buckley (2005). “Everybody Else Is Doing It, So Why Can’t We? Pluralistic Ignorance and Business Ethics Education.” Journal of Business Ethics, Vol. 56, No. 4, pgs. 385-398.
      Prentice, D. A. and D. T. Miller (1993). “Pluralistic Ignorance and Alcohol Use on Campus: Some Consequences of Misperceiving the Social Norm.” Journal of Personality and Social Psychology, Vol. 64, No. 2, pgs. 243–256.

    • 3 comments
    • First comment 21 Apr 2010 by Jon Goldstein
    • Last comment 22 Apr 2010 by Shawn Reed
  10. A Life among the Econ, Particularly at UCLA

    • As a student during this period (PhD 1972) I was extremely fortunate to have been taught by these professors. Well remembered is the BSU bomb incident at the department as well as tenured faculty guarding halls against crazies disrupting classes. Learning to reason as an economist was paramount. On one qualifying exam, I felt one question assumed away the problem and rather than give an answer I pointed out the error. This risky strategy was well received. Alchian was on my dissertation committee but was slow to read the work. Knowing his keen interest in market transactions and since i was facing a deadline for a fellowship stipend, I made him a non serious offer. If he would just read it, I would split any stipend with him. This was not asking for an approval, just a reading. Obviously he would never accept any money, but as i knew he would, the market spirit of the offer was appreciated. During meetings of my nonacademic career, my annoying market based queries would often elicit the query “Where did you come from?”. I now know that the answer should have been “The Golden Age of Alchian’s UCLA Economics Department”.

    • 3 comments
    • First comment 08 Sep 2010 by morrie goldman
    • Last comment 17 May 2011 by josil
  11. Individualism: True and False

    • Much of this introductory chapter to Hayek’s 1948 work deserves ample praise: that rationalist epistemology leads to an ever-encroaching desire to design state-imposed solutions; that individualism recognizes that man in a free state will achieve more than is possible laboring under centralized intelligent design; that true individualism is only selfish in the sense that the individual self directs his own affairs, whatever his egoist or altruist intentions; and that equality is a two-sided coin such that pursuing equality of treatment necessitates inequality of results, and vice versa.

      Unlike some other individualist theorists, his attack on state authority and especially its roots in rationalism is made largely on practical terms. He doesn’t say that statism encroaches on man’s “rights” or on moral principles. Rather, he makes the simple observation that individuals should direct their own affairs because they each are aware of the particulars and the intended objective of those affairs. Society at large and bureaucrats as its representatives simply can not know the ends that men seek in their several endeavors and can not devise all the practical means to achieve them.

      Certainly arguing for a liberal social order from a rights-centered perspective (like that of Locke, Rand, or Nozick) has its own pitfalls. But what if the problem is not with Hayek’s airtight reasoning of matching the actor with his wants, but with his presumption that the correct object of analysis is the individual and not society? If the reader believes that social goals are more aspiring than individual goals, Hayek’s arguments could be used against him: just as it is more practical for individuals to know and direct the pursuits of the individual, it is likewise more practical for society to know and direct the pursuits of society. It is not clear that Hayek has established methodological individualism before arguing for political individualism.

      This should not be a difficult proposition. As societies have become less autocratic and more responsive to democratic impulse, they have also become more tailored towards individualistic ends. Post-war rationalist planners (conservative and liberal) emphasize large welfare states to achieve largely individual goals instead of leviathan state actors to achieve collectivist goals. In other words, history is on the side of the methodological individualist. Yet Hayek did not know this in 1948, and should stress that point more.

      What logically follows from this is that rationalist planners would reduce the ends (and the means) of human pursuits to a least common denominator. As Hayek puts it, “The concentration of all decisions in the hands of authority itself produces a state of affairs in which what structure society still possesses is imposed upon it by government and in which individuals have become interchangeable units with no other definite or durable relations to one another than those determined by the all-comprehensive organization.” (p.27) What is lost is individuality and the localized functions of civil society. Even for those who have communitarian or anti-individualist preconceptions, this is a tragic development.

    • 3 comments
    • First comment 22 Sep 2010 by Tony Quain
    • Last comment 10 May 2013 by Matt
  12. "The Two Faces of Adam Smith"

    • Vernon Smith seeks to solve the Adam Smith problem and reconcile what seem to be two inconsistent views of human nature in Wealth of Nations and The Theory of Moral Sentiments. In Wealth of Nations, Smith’s invisible hand theorem proposes that it is not from benevolence, but rather “the propensity to truck, barter, and exchange one thing for another” which drives our behavior (1776; 1909: 19-20). In The Theory of Moral Sentiments, Smith declares that there are “some principles in… [human] nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it” (1759; 1976: 9). Vernon Smith asserts that these two views are consistent if we recognize a “universal propensity for social exchange” (3). He proposes the following behavioral axiom: ““the propensity to truck, barter, and exchange one thing for another,” where the objects of trade I will interpret to include not only goods, but also gifts, assistance, and favors out of sympathy, that is, “generosity, humanity, kindness, compassion, mutual friendship and esteem” (Smith 1759; 1976, p. 38)” (3). Vernon Smith then proceeds through historical, psychological, and experimental evidence to support this theory. Vernon Smith offers a very convincing and creative solution to the supposed Adam Smith problem. He makes crucial distinctions between reciprocated and non-reciprocated exchange. However, Vernon Smith seems to neglect the importance of non-reciprocated ethical behavior in Adam Smith’s work. Hanley (2010) elaborates on the distinctions between Adam Smith and Vernon Smith. He also points to divergences in opinion on intended beneficence and social vs. unsocial behavior. Vernon Smith asserts that Adam Smith’s explanation of beneficence is “utilitarian” and argues that it arises “from the expectation of reciprocal benefits” (17). This egoistic view of man may not fit neatly into Adam Smith’s conception which encompasses broader views on ethics and virtue.

    • 3 comments
    • First comment 25 Apr 2011 by Echo Keif
    • Last comment 06 May 2011 by Steve Kunath
  13. Economic Enlightenment Revisited: New Results Again Find Little Relationship Between Education and Economic Enlightenment but Vitiate Prior Evidence of the Left Being Worse

    • People believing firmly in free market and voluntary exchange efficiency (just missed some fluctuations in Q.16 and negative externalities in Q17) are wrong and “Unenlightened”.
      People believing after USSR economy TOTAL failure and China transition to market economy that voluntary transactions are inefficient and only Gosplan could succeed to organize it are right and enlightened? Are you sure Q16-17 really helpful?
      BTW, conservatives actually able to count negative externalities.
      Q14: say Farmer A hired 5 immigrants from the country w/o tradition to respect property and human life, dignity etc. Let Farmer A saved for a Seazon $100K his costs (taxation, salary) and shared part of $100K among his product consumers. So, public wealth increased $100K. OK, now, close to the end of the Seazon (game almost over, last move of the gamer could be very unpleasant) this immigrant workers grabbed and killed farmer B and raped farmers’ C daughter and escaped to Mexico.
      Public losses counted say $5 million at least. So, conservatives actually count negative externalities, some libertarians so stubbornly ignore (Caplan vs. Friedman):
      http://econlog.econlib.org/archives/2008/06/milton_friedman_10.html

    • 3 comments
    • First comment 17 May 2011 by rihir akidan
    • Last comment 28 Apr 2012 by Moshe
  14. The Invisible Hand of Jupiter

    • The main point of Macfie’s article, The Invisible Hand of Jupiter (1971), is to analyze, and attempt to reconcile, Smith’s various uses of the famous, yet mysterious, “invisible hand” metaphor throughout his work.

      The original use of the invisible hand is in Smith’s History of Astronomy, an early essay written by Smith, which was published posthumously. In History of Astronomy, the invisible hand belongs to the Roman god Jupiter, and is used by polytheistic “savages” to explain seemingly irregular natural phenomena that interrupt the status quo (e.g., lightning, thunder). In The Theory of Moral Sentiments (TMS) and Wealth of Nations (WN), the invisible hand, assumed by Macfie, among others, to belong to the Christian Deity, is a mechanism of coordination that guides people’s self-love in order to achieve universal benevolence.

      While the uses of the invisible hand seem contradictory, Macfie contends they are not. He suggests that the use of the invisible hand in History of Astronomy was merely where Smith first coined the phrase, and has no significant bearing on its later use in TMS and WN. Macfie interprets the invisible hand metaphor in TMS and WN to be Smith’s attempt to express “his own view as to the relation between divine guidance, the system of nature, and human behavior”, accordingly becoming the energizer of his entire system of thought (pp.598-99).

      While Macfie’s interpretation may be plausible, there is another way to interpret Smith’s use of his famous metaphor. I believe that Smith used the invisible hand metaphor when talking about things beyond human understanding. In History of Astronomy, the savage ascribes lighting, a natural occurrence that he cannot understand, to the mood swings, and invisible hand of Jupiter. In TMS/WN, Smith employs the same invisible hand metaphor when he talks about markets; in doing so, he suggests that people cannot understand why order emerges spontaneously when people pursue their own ends in free markets, but can merely observe that it does. Perhaps this emergent order in markets can be attributed to a benevolent Deity, but, if the use of the metaphor is consistent with its use in History of Astronomy, Smith argues that the cause of this order is outside the realm of human understanding. With this interpretation of the invisible hand, Smith’s seemingly contradictory uses of the metaphor can indeed be reconciled.

    • 3 comments
    • First comment 15 Oct 2011 by Pavel Kuchař
    • Last comment 15 Nov 2012 by Francis Conlon
  15. Can ‘Religion’ Enrich ‘Economics’?

    • I do not share Eric’s confidence in perfectly and justly adminsitered providence.

      If we want things to be better on earth, I do not think we should wait for providence. We may have to wait for a very long time, and poor, starving and vulnerable populations worldwide need out compassion and support today, not whenever providence thinks it is time to do it.

    • 3 comments
    • First comment 30 May 2014 by Eric Rasmusen
    • Last comment 10 Jun 2014 by Nathan W
  16. Education Premiums in Cambodia: Dummy Variables Revisited and Recent Data

    • John, I do not believe you understand my point. Computed as discrete changes, which is what you do, the percentage difference of the premia (college versus high school) is not equal to to the difference of the percentage premia (college versus base minus high school versus base). You are implicitly using a false assumption; it is the same false assumption made by the Mexican government in the example I cited: that the difference of the percentage changes (+50 – 33.3) is the percentage change of the difference. It causes you to greatly overestimate the education premium.

    • 3 comments
    • First comment 30 Sep 2015 by Ronald Michener
    • Last comment 30 Oct 2015 by Ronald Michener
  17. Ideology Über Alles? Economics Bloggers on Uber, Lyft, and Other Transportation Network Companies

    • Hmmm. I entirely agree with the premise of this article: Uber is obviously an economic improvement and all efforts of the incumbent cartel to stymie it should be resisted. Admirably, all of the economists polled, regardless of political orientation, agreed. And indeed it would be nice if some of the more progressive of them spoke up about this. And any article taking Krugman’s ideological blinders to task is worth reading.

      But all that said, it seems that faulting left-leaning economists for remaining silent about Uber on their blogs just goes too far. Maybe they are afraid of ideological reprisal and so keep quiet. That would be shameful.

      But maybe they just feel that they have nothing particularly important to add to the economist consensus on Uber? That seems quite possible. For among the silent, are such as David Friedman, Greg Mankiw, Robin Hanson, and Steven Landsburg.

      Would anybody suspect any of these of being afraid of left-wing political reprisals for as anodyne a policy as supporting Uber? Any of their readers can see them voluntarily waving much bigger red flags at Progressive bulls on a frequent basis.

      In fact, their silence is some evidence that they just agree with the pro-Uber consensus. For any of these worthies had convinced himself that for some curious, clever reason Uber was the rare example where they oppose liberalized markets, they would have been sure to blog about it.

      So, if we can attribute the silence of “conservative” econ bloggers to blameless reasons, why not give those on the other side the same courtesy?

      That said, influential progressive Econ bloggers should be particularly encouraged to voice their support for Uber, even they have nothing novel or clever to add. A few such posts would do a great deal more for the common cause, than a hundred eloquent posts by econ bloggers on the other side of the spectrum preaching to the choir.

    • 3 comments
    • First comment 30 Sep 2015 by Michael Maloney
    • Last comment 24 Oct 2015 by Carl Edman
  18. Faculty Voter Registration in Economics, History, Journalism, Law, and Psychology

    • Sean T. Stevens, in preparing a blog post for Heterodox Academy about the Langbert, Quain, and Klein article in EJW, scrutinized the article and caught a problem, and then kindly sent us a query about it.

      Sean noticed that in footnote 5 (p. 424) we list University of Florida and University of Miami as among those universities that, though ranked high enough by U.S. News to be included in our investigation, were not included because they sit in states not covered by Aristotle (the database used for the study).

      But Sean noticed that in footnote 4 (p. 423), listing the states not included in Aristotle, Florida is not listed. In fact, Florida is covered by Aristotle. In fact, those two Florida universities should have been included in our investigation.

      To rectify the problem, we need to investigate the two universities that have been mistakenly left out of our analysis, which covered 40 universities. Although our subscription to Aristotle had expired, Aristotle has generously restored to us temporary access, to rectify the problem. We are proceeding now and will report back on the findings; look for a notice here at EJW News.

      We are grateful to Sean for catching our error and bringing it to our attention!

    • 3 comments
    • First comment 02 Oct 2016 by John Quiggin
    • Last comment 07 Oct 2016 by AlanTan
  19. The Social Science Citation Index: A Black Box—with an Ideological Bias?

    • Hoover Institution publication Policy Review just printed its last issue this month (2/2013). That’s one less conservative SSCI journal cited in the Klein and Chiang article. Will any of the remaining conservative academic journals (such as ANAMNESIS, Academic Questions, First Things or Modern Age) ever obtain SSCI?

    • 2 comments
    • First comment 01 Nov 2011 by Alex Littlefield
    • Last comment 11 Feb 2013 by Alex Littlefield
  20. Adam Smith and Conservative Economics

    • I’m struck by a sense of deja vu in the treatment of Adam Smith by political philosophers after his death – indeed, it is much the same treatment a consistent modern friend of liberty might expect from orthodox conservatism and progressivism. The right wing of US politics invokes Smith and other classical liberal economists to defend private property and attack the idea of government intervention in the economy on behalf of the poor, but the cannier among them (such as Burke, among the early 18th-century crop of conservatives) know that true friends of individual liberty are no true friends of their favorite projects – wars and mass expenditures in the name of national greatness and tradition.

      As Rothschild’s article documents, Smith considered government interference in markets ‘a combination of the rich to oppress the poor,’ far from Burke’s conception of it as the agent of the deity on Earth. Of course, when Smith refers to ‘the rich,’ he usually seems to have in mind not capitalists involved in production in a free market but aristocrats wealthy from hereditary privilege and merchants wealthy from government-granted privilege. Smith takes the elites to task, though, not for simply having accumulated large amounts of wealth, or benefiting from a naturally unjust system of property, but for their lack of classical virtues. Smith saw the profligate, frivolous, aristocratic elite that used their influence to tip regulation in their favor as not measuring up to the humble masses engaged in honest toil in many virtues (his primary system of virtues in TMS emphasized prudence, temperance, courage, justice, and love). While falling short in most virtues is blameworthy yet not worthy of punishment, violating commutative justice was definitely considered by Smith as worthy of punishment, and he regrets that any aristocrat should be so powerful and wealthy as to be above the law in TMS.

      Smith should not be read as advocating liberty as simply an instrument to prosperity, to be easily abandoned in such cases in which we believe we can achieve greater prosperity with a clever regulation. Not only is liberty an intrinsic good, for those who have it and for their society, but it positively encourages virtue in general as much as it promotes prosperity. This is why we would never see the shade of Smith siding with the French revolutionaries or the radical left, who want to abrogate liberty and commutative justice in pursuit of a new system of property and a society subordinated to the will of the state. Smith may have had great sympathy for the poor, but it didn’t extend to his advocating the expropriation of the wealthy. Indeed, this might explain why Smith became somehow painted as an arch-conservative apologist for the wealthy despite what he actually wrote: while in Smith’s philosophy, some wars are justified, many customary, traditional and religious rules are laudable, and it makes sense to feel some measure of pride in the greatness and good fortunes of one’s country, it is always contrary to all morality and propriety to rob one’s neighbor, no matter his wealth and no matter your need. Smith can rail against utopian schemers with righteous indignation but would never do the same against God, king and country. Sometimes the distinction between a classical liberal and a conservative appears very fine, and even adherents of either philosophy may confuse or conflate the two, hence the conservative advantage in the race to claim Smith.

      It’s sobering to think that the controversy over Smith’s allegiances has been waged without interruption for over two hundred years and counting, now, and in many respects, the arguments have not much changed. Considering the obfuscation and self-censorship Smith had to practice in his writings and the incentives for political groups to claim him as one of their own, I would not be surprised if we all fought over Smith for another two centuries.

    • 2 comments
    • First comment 07 Oct 2010 by Steve Kunath
    • Last comment 19 Oct 2010 by Brian Bedient

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